A computer-assisted expert algorithm for real estate valuation in Spanish cities

Larraz, Beatriz; Navarro, José Luis Alfaro; Cano, Eduardo Díaz; Alfaro, Esteban; García, Noelia; Gámez, Matías

doi:10.1177/2399808320947729

Cited by 3 publications

(2 citation statements)

References 26 publications

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“…Kim et al (2020) used an automated sales comparison method to evaluate apartments in Korea, and found that their approach outperformed machine learning methods. Using a computer-assisted expert algorithm, Larraz et al (2021) consider differences in characteristics compared to similar properties and their relative location.…”

Section: The Market Comparison Approachmentioning

confidence: 99%

From appraisal function to Automatic Valuation Method (AVM). The contribution of International Valuation Standards in modern appraisal methodologies

Salvo

2024

Aestimum

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In the real estate appraisal, as well as for any other scientific discipline, there is a continuous development of knowledge with related theoretical and applicative evolution that takes place primarily on the doctrinal level. The discipline has been object of regulatory and technological improvement aimed at concretizing and defining theoretical principles and methodologies. The functions of value appraisal, formulated in the different procedures that fall within the Market Oriented Approach indicated by the International Valuation Standard, have undergone a process of evolution that has favoured the introduction of Automated Valuation Methods (AVM). This evolution process represents an improvement of the conventional appraisal models that have improved the techniques of data retrieval and data base access and certify the reliability of the models to build efficient evaluation processes and universally recognized. This article aims at reviewing the methodological evolution in relation to the national market approach that the estimation discipline has recorded in recent years by virtue of the drafting and adoption of the International Valuation Standards.

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Section: The Market Comparison Approachmentioning

confidence: 99%

From appraisal function to Automatic Valuation Method (AVM). The contribution of International Valuation Standards in modern appraisal methodologies

Salvo

2024

Aestimum

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“…Larraz et al. ( 2021 ) use a computer-assisted expert algorithm and consider differences in characteristics compared to similar properties and their relative location.…”

Section: Literature Reviewmentioning

confidence: 99%

From human business to machine learning—methods for automating real estate appraisals and their practical implications

Stang

Krämer

Nagl

et al. 2022

Z Immobilienökonomie

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Until recently, in most countries, the use of Automated Valuation Models (AVMs) in the lending process was only allowed for support purposes, and not as the sole value-determining tool. However, this is currently changing, and regulators around the world are actively discussing the approval of AVMs. But the discussion is generally limited to AVMs that are based on already established methods such as an automation of the traditional sales comparison approach or linear regressions. Modern machine learning approaches are almost completely excluded from the debate. Accordingly, this study contributes to the discussion on why AVMs based on machine learning approaches should also be considered. For this purpose, an automation of the sales comparison method by using filters and similarity functions, two hedonic price functions, namely an OLS model and a GAM model, as well as a XGBoost machine learning approach, are applied to a dataset of 1.2 million residential properties across Germany. We find that the machine learning method XGBoost offers the overall best performance regarding the accuracy of estimations. Practical application shows that optimization of the established methods—OLS and GAM—is time-consuming and labor-intensive, and has significant disadvantages when being implemented on a national scale. In addition, our results show that different types of methods perform best in different regions and, thus, regulators should not only focus on one single method, but consider a multitude of them.

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Overcoming Long Inference Time of Nearest Neighbors Analysis in Regression and Uncertainty Prediction

Koutenský,

Šimánek,

Čepek

et al. 2024

SN COMPUT. SCI.

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The intuitive approach of comparing like with like, forms the basis of the so-called nearest neighbor analysis, which is central to many machine learning algorithms. Nearest neighbor analysis is easy to interpret, analyze, and reason about. It is widely used in advanced techniques such as uncertainty estimation in regression models, as well as the renowned k-nearest neighbor-based algorithms. Nevertheless, its high inference time complexity, which is dataset size dependent even in the case of its faster approximated version, restricts its applications and can considerably inflate the application cost. In this paper, we address the problem of high inference time complexity. By using gradient-boosted regression trees as a predictor of the labels obtained from nearest neighbor analysis, we demonstrate a significant increase in inference speed, improving by several orders of magnitude. We validate the effectiveness of our approach on a real-world European Car Pricing Dataset with approximately $$4.2 \times 10^6$$ 4.2 × 10 6 rows for both residual cost and price uncertainty prediction. Moreover, we assess our method’s performance on the most commonly used tabular benchmark datasets to demonstrate its scalability. The link is to github repository where the code is available: https://github.com/koutefra/uncertainty_experiments.

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A computer-assisted expert algorithm for real estate valuation in Spanish cities

Cited by 3 publications

References 26 publications

From appraisal function to Automatic Valuation Method (AVM). The contribution of International Valuation Standards in modern appraisal methodologies

From appraisal function to Automatic Valuation Method (AVM). The contribution of International Valuation Standards in modern appraisal methodologies

From human business to machine learning—methods for automating real estate appraisals and their practical implications

Overcoming Long Inference Time of Nearest Neighbors Analysis in Regression and Uncertainty Prediction

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